Human Capital and the Older WorkerThe need for solid indicators

Peter Ester

OSA - Institute for Labour StudiesTilburg University, Netherlands

Presentation at the Second OECD World Forum “Statistics, Knowledge and Policy”Istanbul, Turkey, 27-30 June, 2007

Three challenges for OECD economies

• ageing & declining workforce

• acceleration of globalization

• swift move towards knowledge economy

Solutions to challenges?

• immigration scenario: little enthusiasm

• most popular scenario: keeping older employees longer in the workforce

• anti-early retirement policies

• but: longer working is NOT enough: we need MORE productive & flexible older workers

• maintain and secure older workers´human capital

Shifting age productivityThe Netherlands: 1989-2001

0

20

40

60

80

100

120

15 20 25 30 35 40 45 50 55 60 65

age

1989 2001

Shifting age productivityThe Netherlands: 1989-2001

• productivity peak has shifted to higher cohort ages by about 10 years

• implication: generations differ in productivity

• more recent generations are more productive

• need for comparative OECD indicators of human capital by age and generation

Training & work

Heckman (2000)- “Skills beget skills” early investments

promote later investments in human capital

Schils & Fouarge (2007)- training reduces early retirement 7%-points increase of labour force

participation of 50-64 year old

Self-reinforcing effect: training employment training …

Work experience & informal learning

Arrow (1962)- learning by doing important determinant of

productivity growth

Borghans, Golsteyn & De Grip (2006)- informal learning: 96% of total learning on-

the-job- 1 year of work=1/2 year of formal education- at age 60: still 25% of working time- propose indicators for informal learning and

skill acquisition

Conclusions• OECD economies depend on older workers• but: competitive in terms of human capital,

employability & productivity• major concern for OECD countries• need for solid OECD trend indicators on human

capital of older workers• comparative indicators of human capital by age

groups and by generation• comparative indicators on informal learning and

skills acquisition• OECD economies need to invest in older workers• human capital of older workers: OECD’s next

frontier

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